Updated: August 1, 2017
Status: Ongoing Case
Labaton Sucharow, as co-lead counsel, represents H&N Management Group, Inc. and Aff Cos Frozen Money Purchase Plan (the Plan) in a derivative action, challenging a series of decisions made by the board of directors of AGNC Investment Corp. (f/k/a American Capital Agency Corp.), a mortgage REIT, to approve exorbitant annual fee payments to the company’s external asset manager and then, ultimately, to acquire that manager for a massively-inflated price.
Prior to the filing of the complaint, Labaton Sucharow and co-counsel successfully litigated a books and records demand and obtained, through a settlement of that action, confidential AGNC records that shed light on the board’s questionable decisions. The Plan alleges that these decisions were the result of a major conflict of interest: every member of the AGNC board of directors was also a director of a second company, MTGE Investment Corp. (f/k/a American Capital Mortgage Investment Corp.), that shared the services of AGNC’s manager but paid substantially lower fees for those services. The AGNC board’s divided loyalties repeatedly prevented it from seeking the best deal for AGNC and its public stockholders, because to do so could have harmed MTGE.
On August 1, 2017, Delaware’s Court of Chancery denied defendants’ motion to dismiss, and the case is now in discovery. The case is H&N Management Group, Inc. & Aff Cos Frozen Money Purchase Plan v. Couch, et al., No. 12847 (Del. Ch.)